Then why are profits breaking records each quarter? The oil companies just went before the Senate to audaciously defend the billions in subsidies given them each year.
??? It was 12 cents a gallon 2 or 3 months ago. I don’t know about your town but it’s not uncommon for there to be a 10 cent or more variance between stations in mine.
“Then why are profits breaking records each quarter?”
When you’re talking billions of barrels you are talking about some very big numbers. Many people are misled by this. So ... here’s an example for your AP students
Let’s suppose I buy $1.00 worth of crude for my refinery and sell the finished product for $1.05. I’ve made a 5% profit (not all that far off how refineries are performing economically these days).
Now let’s suppose my crude supplier charges me $2.00 for that barrel I run through my refinery. I sell it for that same 5% profit when I sell it for $2.10.
My profit was $.05 and now it is $.10. But it is still the same return on investment.
Oh my gosh! That’s a 100% increase in profits! Outrage! Windfall! You’ve done nothing to deserve this (ignoring the fact that I invested twice as much money as before). We’re in pain and we think we’re being screwed. Increase taxes or come up with some sort of penalty for this outlaw company!
Well, you may be getting screwed, but it isn’t by my company. If you want lower prices (and to do something constructive about the pain vs vindictive), find competition for the guy who sells me crude. Perhaps by truly opening up drilling right here at home -— ANWAR, offshore, government land.